"We have worked hard to learn from past experiences to ensure that this new agreement is in the best interests of taxpayers and will bring a successful, world-class sporting event that Baltimore can be proud of for years to come," Rawlings-Blake said in a statement.

The mayor's office did not say who would receive the contract to operate the three-day racing festival.

Those close to the discussions say the city has been negotiating exclusively with Dale Dillon, an Indianapolis-based contractor. Sources say Dillon plans to partner with Felix Dawson, a former Constellation Energy executive, to organize the race.

Both men played a role in the group that organized last year's race, the first time the IndyCar series came to the city. Dillon served as Baltimore Racing Development's general manager in the final weeks before the race, and city officials praised his ability directing the operations. Dawson invested in the racing group.

Rawlings-Blake's office canceled Baltimore Racing Development's contract late last year, after the company failed to pay $1.5 million in city taxes and fees — part of the group's estimated $12 million in debts overall.

It is unclear whether the city will require the new group to repay any of Baltimore Racing Development's debts to the city, state, vendors and investors.

The deal is slated to be presented to the Board of Estimates, the city's spending panel, on Feb. 22, according to the mayor's statement.